Title: Board characteristics, ownership structure and audit report lag in the Middle East

Authors: Mohamed A.K. Basuony; Ehab K.A. Mohamed; Mostaq M. Hussain; Omar K. Marie

Addresses: School of Business, American University in Cairo, New Cairo, Cairo, Egypt ' Faculty of Management Technology, German University in Cairo, New Cairo, Cairo, Egypt ' Faculty of Business, University of New Brunswick-Saint John, Saint John, NB E2L 4L5, Canada ' Faculty of Management Technology, German University in Cairo, New Cairo, Cairo, Egypt

Abstract: Timeliness of corporate annual financial reports has a significant importance for users of financial statements. Timeliness of financial reporting of companies is considered to be a critical factor that affects the usefulness of information that helps the external users. This paper goes beyond the standard audit report lag studies by incorporating board characteristics and ownership structure variables into the determinants of financial reporting timeliness. The sample of this study comprises of 201 companies for the period from 2009 to 2013 that cover 11 countries of S&P Pan Arab index. Ordinary Least Square (OLS) and Ridge regression analysis are performed to test the audit report timeliness determinants. This study examines the effect of board characteristics, ownership structure, audit type, firm size, firm age, leverage and firm profitability on audit report timeliness. The results reveal that the higher percentage of companies releasing their audit report in less than 60 days and are audited by big four firms shows that big four firms are characterized by a higher audit quality. A regression analysis indicates that CEO duality, board size, board independence, ownership concentration, institutional ownership, foreign ownership, auditor type, return on assets, and firm age significantly affect audit report lag.

Keywords: Arab countries; audit report lag; board characteristics; Middle East; ownership structure; timeliness; annual reports; financial reporting; ordinary least squares; OLS; Ridge regression analysis; audit type; firm size; firm age; leverage; firm profitability; audit quality; CEO duality; board size; board independence; institutional ownership; foreign ownership; return on assets; ROA.

DOI: 10.1504/IJCG.2016.078388

International Journal of Corporate Governance, 2016 Vol.7 No.2, pp.180 - 205

Received: 04 Feb 2016
Accepted: 27 Jun 2016
Published online: 15 Aug 2016 *

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